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Fed insider calls for wholesale reforms

More voices are coming out of the establishment calling for the Federal Reserve to be overhauled and lose its private owners — the Wall Street banks — and be more accountable to the American public, an insider said Monday.

Dartmouth economics professor Andrew Levin, a one-time special adviser to then Fed chair Ben Bernanke between 2010 to 2012, is the latest insider looking to blow up the quasi central bank.

“A lot of people would be stunned to know” that the Federal Reserve is privately owned, Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”

Levin wants the 12 regional Fed banks to be brought fully into the government, since they are key regulators and contributors in setting interest-rate policy.

With greater visibility and speaking opportunities the selection process for regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are men who formerly involved with Goldman Sachs.

As I write this a headline just moved saying the NY Fed — not very happy with the Atlanta Fed’s influential GDPNow growth tracking site — is going to launch its own version. The NY Fed’s GDP tracker will be at least 10 BPs higher than Atlanta’s if for no other reason than to keep the Ponzi scheme going.